Most of the developing countries that were trapped in middle income trap were due to de-industrialize and lack of industrial power. China is already way past that with everything from infrastructure, electricity consumption, and cars ownership. You are talking about the middle income trap which is around $13,000. Most of China's east coast provinces and cities have over $15,000 GDP per capita.
As for nobody buying your products, you mean a war with the US. If there were a war, then middle income trap is the last thing that you need to worry about.
Middle income countries got stuck in middle income or unable to move beyond middle income are mostly with countries that don't have their own industrial giants and champions. China has its own industrial giants and champions and dominate in many key industries.
Anglo-Saxon international liberal orders have ensured that many countries don't have a complete supply chain and rely upon the West. As we have witnessed in Russia, China is fully capable of supplying Russia with everything that it needs. That means China could survive any embargo and would come out ahead of the West as the West is much more de-industrailize and rely upon China than the other way around.
The sole reason why there is a trad war and why the US is using everything to stop China's rise is that China is the only country for centuries outside of the Western powers that has the capability and pieces in place to fully decouple with the West which scares a hell out of the Western powers that now trying to threaten China with kitchen sinks in order to stop China's rise.
I don't disagree with most of what you said, but national champions are only one piece of the puzzle. Having a Huawei or a BYD does not mean your entire economy is going to thrive. The scale of China's economy is not what a few national champions can drive. Demand is going to be a huge challenge, because different from countries like Vietnam or South Korea, there's not enough external demand in the entire world to power an economy three times the size of the US's - which is what China will have to be to have similar GDP per capita to top 10 countries.
Also, you can't fix this by dominating every industry, because doing so means that every other country in the world - outside of maybe the resource exporters - won't have strong economies, and then you wouldn't be able to export anything because they won't be able to pay for it. The US is able to create such immense demand
because it runs a huge trade deficit. If the West had a surplus like China, they wouldn't be able to absorb all those exports, in which case export-based strategies like those in East Asia would never work.
Bottom line - there has to be demand for supply side industrial strategies to work. East Asia's biggest problem, historically and currently, has been demand. Too much money is tied up in property & savings accounts, in rent seeking investments that don't contribute to productivity. Japan had this problem, and now both South Korea and China have it too. East Asians are very productive, but they are poor consumers.
